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Under-review association linked to same firm as downgraded provider
A housing association under review by the regulator has links to the same organisation that was found to have “conflicts of interest” with a non-compliant association, Inside Housing can reveal.
Last week, the Regulator of Social Housing (RSH) added Bespoke Supportive Tenancies (BeST) to its ‘grading under review’ list, meaning it believes there may be compliance issues to be investigated.
BeST is a lease-based association, meaning it does not own most of its homes but leases them from investment funds. In July last year, it took on the 35-year leases for 24 homes that were previously managed by First Priority, a housing association that almost went insolvent.
The RSH has been investigating housing associations with similar business models for months and in November last year slammed one of them – Westmoreland – for “inherent conflicts of interest”.
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This is understood to have been in part related to the fact that Westmoreland’s chair is John Russell, who is also the chair and founder of Fairhome, an aggregator.
Aggregators source supported living homes, package them with long-term lease deals, find housing associations willing to take them on and present them as investment opportunities to real estate investment trusts and private equity funds in exchange for a fee.
Inside Housing has discovered a former director at BeST is now linked to the same firm, and a current senior staff member is a former employee.
Companies House reveals that one of its founding directors, Colin Gore, became a director of Fairhome in November 2013, after resigning his directorship at BeST the previous month.
BeST’s head of property asset management, Andy Bate, joined from Fairhome in March 2015, according to his LinkedIn profile.
There is no suggestion of wrongdoing by either of these directors and it is not suggested that they worked at BeST and Fairhome simultaneously.
It is not yet known if alleged conflicts of interest form part of the regulator’s investigation into BeST. The regulator will publish its full judgement of the organisation in due course.
Furthermore, in his statement to BeST’s 2014/15 accounts, then chair David Poppitt wrote: “I first learnt of the work of BeST whilst talking to John Russell, who I have known for many years through our joint association with Broughton Park Rugby Club.”
Kevin Appleby, chief executive of BeST, confirmed that the association had worked with Fairhome in the past but denied that there were any conflicts of interest.
He added: “The [grading under review] communication received from the regulator confirms that we are currently compliant with the regulatory standards. The regulator has welcomed our positive approach to providing the assurances they require to continue with full compliance.”
A spokesperson for Fairhome said: “There have been informal connections in the past, as there are between so many organisations working in the supported housing sector, such as employees moving on to other organisations.
“We work with many different providers on projects across the UK and have previously worked with BeST, but not since September 2016. We certainly do not believe that there have been any conflicts of interest as a result of any dealings we have had with BeST.”
